Feasibility Report: Establishing a Chocolate Factory in India

Desklib offers solved assignments and past papers to help students succeed.

ENTREPRENEURSHIP: CREATING A
BUSINESS OPPORTUNITY
CHOCOLATE FACTORY IN INDIA
1

EXECUTIVE SUMMARY
In this assignment feasibility of the establishment of the organisation is given in the form of a feasibility
report. This report is prepared on the basis of various methods which are used for the analysis of the
organisation. Various analyses such as micro market, macro market, risk management, sustainability,
and opportunities are performed in this assignment. This report shows the sustainability of the business
that the business is profitable or not.
Various techniques are used in this report for identifying the factors affecting the business
establishment. The profitability of the new proposed business of chocolate production is also checked
here by the virtue of breakeven analysis. Positive breakeven point shows that the company is profitable
so it can run long.
2

CONTENTS
EXECUTIVE SUMMARY.................................................................................................................................2
TABLE OF FIGURES.......................................................................................................................................4
INTRODUCTION...........................................................................................................................................5
ANALYSIS OF THE KEY CONCEPTS AROUND OPPORTUNITY, ENTREPRENEURIAL BEHAVIOR AND THE
FACTORS IN THE PROCESS OF START-UP AND OF SURVIVAL.......................................................................6
THE BUSINESS OPPORTUNITY..................................................................................................................6
IDENTIFY IDEAS TO CREATE OPPORTUNITIES, (NATIONAL OR INTERNATIONAL) THOROUGH A FEASIBILITY
ANALYSIS AND EVALUATE USING THE RELEVANT DISCIPLINES AND FRAMEWORKS...................................8
ASSESSMENT OF FEASIBILITY THROUGH RELEVANT RESEARCH TECHNIQUES AND RESEARCH SOURCES
FOR A MACRO AND MICRO LEVEL ANALYSIS.............................................................................................10
FEASIBILITY: MICRO – MARKET ANALYSIS..............................................................................................11
FEASIBILITY: MACRO MARKET ANALYSIS...............................................................................................13
FEASIBILITY: COMPETITIVE ENVIRONMENT AND DIRECT COMPETITORS..............................................16
FEASIBILITY: CASH FLOW ANALYSIS.......................................................................................................18
OVERALL VIEW OF AN ECONOMY..........................................................................................................20
CONCLUSION.............................................................................................................................................22
REFERENCES..............................................................................................................................................23
3

TABLE OF FIGURES
Figure 1 PEST ANALYSIS...............................................................................................................................8
FIGURE 2 SEVEN DOMAINS OF OPPORTUNITIES.......................................................................................11
FIGURE 3 PEAS...........................................................................................................................................17
4

INTRODUCTION
Entrepreneurship is a process of setting a business not only for earning profit but for supporting a good
cause. A person who possesses his process is called an entrepreneur. Entrepreneurship is a process in
which the people who have the risk-taking ability and initiative power, establishes a business venture for
supporting a cause. There is one large difference in entrepreneurship and a normal business venture
that in entrepreneurship it is always focused on finding a solution of any problem rather than earning
profit only (Golden et al., 2016).
For opening a chocolate factory in India as a business venture, overall condition and generating
feasibility report of the business is necessary. It can be done by applying various theories.
5

ANALYSIS OF THE KEY CONCEPTS AROUND OPPORTUNITY,
ENTREPRENEURIAL BEHAVIOR AND THE FACTORS IN THE PROCESS OF
START-UP AND OF SURVIVAL
THE BUSINESS OPPORTUNITY
As in India, now establishing startup is in trend. The current market scenario in India is economically
developing. Any business opportunity depends on some factors as the economy of the country, need of
the product and different cycles of operations. In the Indian context, the economy is growing and trends
are supporting the establishments of any new business venture (Lambert, 2017).
In this assignment, a new business start-up in the field of chocolate production in India is planned. For
establishing a chocolate factory, identifying the need for the product is necessary. This product covers a
larger community in India (Lambert, 2017). It attracts children very most. As it has a larger competitive
market but by identifying new opportunities it would be easy to enter in such competition (Gupta, and
Bhaskar, 2016).
In India, it is estimated that by 2019, the Indian chocolate industry will reach the mark of Rs 122 billion
(Thakur, and Majid, 2017). India has a larger amount of Indian and multinational chocolate
manufacturing companies. These are domestic as well as international. India is leading in consumption
of chocolate. It attracts the entrepreneurs to establish new chocolate production factory in India. It also
brings many opportunities for this biz.
Many factors affect the process of start-up and survival. Some key factors are
Business plan: - a proper business plan is necessary for establishing a new business. It works as the
beginning of the organisation. In the case of opening a chocolate factory, its design is a must. It includes
the design of the plant, design of chocolate and selection of the flavour etc.
Forecasting: - forecasting for future situations are very important for a sustainable business. It provides
stability to the business. It provides some key points that affect the business venture. In the case of the
chocolate factory, forecasting about the future resources and market condition should be done properly
(Pappu, 2019).
Execution and management: - after planning and forecasting proper execution of the plan is necessary.
It requires great managerial skills.
Country’s economy: - any country’s economy is one of the key factors which affect the growth of the
organisation. In this case, India is chosen as the country for establishing the business. In India, the
chocolate business has a huge scope and it is also profitable to the economy so it is nice to open a
chocolate factory plant here (Gupta, and Bhaskar, 2016).
6

Rules and legislation: - rules & regulations of any country related to the business, affects the business
and business environment very most. In case of any food processing unit like a chocolate manufacturing
unit, it has to take appropriate food licence from the authority. In India, Food licence is provided by
FSSAI (Pappu, 2019).
7

IDENTIFY IDEAS TO CREATE OPPORTUNITIES, (NATIONAL OR
INTERNATIONAL) THOROUGH A FEASIBILITY ANALYSIS AND EVALUATE
USING THE RELEVANT DISCIPLINES AND FRAMEWORKS.
In terms of identifying opportunities, many techniques are used by business organisations. In India,
there is a huge scope for opening a chocolate manufacturing industry. In the field of chocolates, any
industry can produce many varieties as it has a very vast range like organic chocolates, homemade
chocolates, sugar-free chocolates, dark chocolates and premium chocolates.
For identifying opportunities PEST analysis is helpful.
PEST analysis is an approach followed by the organisation for identifying the opportunities for any
business by analysing different factors (Sammut Bonnici, and Galea, 2015‐ ). These factors are
Figure 1 PEST ANALYSIS
Source: - (Sammut Bonnici, and Galea, 2015)‐
Political factors: - political factors play an important role in the establishment and growth of any
company. It includes various rules and regulations related to taxation, labour, wages, and industrial
safety etc. (Sammut Bonnici, and Galea, 2015‐ ).
Economic factors: - economic analysis is an important factor for any country or industry. It affects the
growth of the company by the means of labour cost, inflation, interest rate, business cycle, exchange
rates etc. (Sammut Bonnici, and Galea, 2015‐ ).
Social factors: - many social factors affect the working and performance of an organisation. It includes
some factors like education, attitudes, leisure interest, culture etc.
8

Technological factors: - any change in the technology also brings changes in the procedures followed by
the industries. These factors include innovations in technology, new techniques used for operations like
supply chain, technological diffusion etc. (Sammut Bonnici, and Galea, 2015‐ ).
9

ASSESSMENT OF FEASIBILITY THROUGH RELEVANT RESEARCH
TECHNIQUES AND RESEARCH SOURCES FOR A MACRO AND MICRO LEVEL
ANALYSIS
Many feasibility tests are performed on the organisation for identifying and creating opportunities.
Different methods are applied to different disciplines.
For having an overall view of the economy, the following tools are used:
CIGARS
WISPA
For performing cash flow analysis of an organisation during the operation, the following tools are used:
BREAKEVEN ANALYSIS
RISK ANALYSIS
For performing micro market analysis, the following tools are being used:
CWISAT
7- DOMAINS
For macro market feasibility analysis, the following tools are being used:
CRIMSON BLADE
GETplus4
For getting information about the market competitors of the business, these tools can be used:
PEAS
Porter’s 5 FORCES
10

FEASIBILITY: MICRO – MARKET ANALYSIS
For doing a micro-level analysis of the new business we have the following theories.
 7- Domains
 CWISAT
7- Domains
7- Domains are the model given by a professor and entrepreneur John Mullins. He developed a model
consisting of seven domains which are included in the book "the new business road test".
In this model, the new venture is separated into 7 different domains. These are given below:
FIGURE 2 SEVEN DOMAINS OF OPPORTUNITIES
Source:
These domains affect the establishment of any business. These are given below:
Market attractiveness: - this is a micro market factor which affects the entry of the business in a
particular sector. Market conditions for chocolate production affect the establishment of chocolate
production factory.
Target segment benefits and attractiveness: - it is a macro market factor which affects the business
establishment. It attracts the targets and benefits related to that.
11

Industry attractiveness: - it is an industrial factor which affects the environment of business setup. It
brings attractiveness in the market for the business.
Competitive and economic sustainability: - it is a very important factor for any market. The success of
any business depends on the economic sustainability of the country.
Mission, aspirations, propensity for risk: - it is the factor which declares the missions and aspirations of
the organisation.
These domains need to measure individually and analytically. Strength and weaknesses of the domains
are considered as part of the overall analysis.
CWISAT
CWISAT is an approach to find microbusiness opportunities. It is an acronym. It's every letter consists of
some meaning. It is a tool for identifying the need of the customer. At the time of interaction with
customer one, CWISAT form filling should be done. CWISAT consists of the following
Client details: - this portion in the CWISAT form requires the basic details of the customer like name,
gender, and age group etc. it helps in identifying the need of the product so appropriate action can be
taken by the authority.
Welcome: - it is a scripted note in the form. When the person meets the client or interviewee, it might
hesitate so putting a welcome note brings confidence and also makes the presentation professional.
Interviewer briefing: - it includes the specifications that should be followed by the staff. It can include
the instructions of the manager or interviewer.
Seven questions: - make 7 questions to take confirmation of the client for the product. It clarifies the
decisions of the people. By these 7 questions, a lot of information about the customer can be gathered
easily.
Any other thoughts by the interviewee: - after the above questionnaire, usually people got some
induced idea. So writing that idea will beneficial for making a future strategy about the people.
Thank you: - after completing the interview, for a confident and professional goodbye; thank you note
can be used. It concludes al the statements related to leaving the place.
In completing CWISAT details hardly 2-3 minutes are required. At least 30 interviews should be done. So
it would take 1.5 hrs. After this interview, now the person becomes able to make a future strategy.
12